Vanco Share Discussion Threads

[02bursar] 13/5/2008 08:16

It'll be interesting as there are also ABC's that were already tied up with Vanco: Flag [part of Reliance - Swisscom, Deutsche Telecom.

[moob] 12/5/2008 17:14

Energis - whahappen to that one

[masurenguy] 12/5/2008 17:01

I can't see Vanco surviving as an independent entity via any rights issue. They will either be taken over (most likely outcome), be partially taken over via a highly dilutive placing with a third party (possible) or they'll go into administration (unlikely but not impossible). Obviously, only time will tell !

[moob] 12/5/2008 16:42

rights issue at 23p?

[windjammer] 12/5/2008 16:39

taffee

vanco must have found a buyer 225p per share i wish

[taffee] 12/5/2008 16:24

was that a trade at 2.25p!

[kingsize] 12/5/2008 16:08

From Post 932, "IBM and Accenture have been suggested as buyers". Don't know about Accenture, but I believe IBM recently passed a large chunk of its network outsourcing business to AT&T. Therefore I would be surprised if they were a likely buyer.

This is the industry that included Energis, NTL and Marconi - all thriving now. I do hope my Vanco shares do not end up as worthless as my Energis ones but I won't hold my breath.

[rk23] 12/5/2008 14:47

I was seeking some opinions in regards to the price of Vanco, if they do come back on the market, what is a realistic price based on the current news, and also vague rumours that they may be bought out, again what realistic price do you think the share holders will get? I bought 2000 of these at 67p a couple of days prior to suspension, still on T20 unlikely they will come back round prior to my settle/purchase date of 06/06/08

[masurenguy] 11/5/2008 11:40

He talked the talk but it looks like he subsequently tripped on walking the walk !



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I think that Vanco will be bought but the big question is by whom and at what price ? With the level of debt that exists I don't think that there will be much in it for existing shareholders !

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The Sunday Times
May 11, 2008

Vanco's race ace spins out of control
How Allen Timpany's world was turned upside down

'Vanco told the market that the extension of its debt facilities provided it with "good working headroom to meet temporary fluctuations". This announcement raised serious questions about Vanco's financial management and its business model, of which Timpany was its loudest proponent. One analyst believes that the company may have burnt close to £60m of cash during the five-week period because it hadn't used up all its debt facilities before the extension and had received customer payments in the meantime. Where that cash went is a mystery to be unravelled by Andrew Coppel, former boss of hotel firm Queens Moat Houses, who was parachuted in to sort through the mess.'

'A source at the company said concerns were raised over the management style of Timpany, who retained a 46% holding. "It was growth at all costs, so you need to ask whether the business on the books was sufficiently profitable," he said. "His focus was on sales rather than margins." Former advisers say Vanco was encouraged to pursue a rights issue to solve the firm's cash-flow problems and sort out its debt but this idea was resisted. City sources suggest Timpany may have stood in the way of restructuring proposals that would have saved the company. "This was his baby. Vanco should have had a plan B. It needed a much bigger balance sheet and didn't do proper governance," another analyst said.'

'Coppel hopes he can restore Vanco. "It's a very good business," he said. "Vanco has an excellent team and I am working with them to ensure that the business can continue to grow." Vanco's banks, including its main lender, Lloyds TSB, are said to be supportive. The company is expected to be sold and approaches were received last week. IBM and Accenture have been suggested as buyers. Two years ago, Vanco was worth almost £400m. Today its value is around one tenth of that.'

[moob] 08/5/2008 07:59

Yesterday, Vanco suspended its shares on the London Stock Exchange, and on Monday 5th May, Allen Timpany announced his resignation from Vanco.

The principle reason for the suspension is that there is uncertainty about the results for the year ending January 2008. We are still operating within our facility, but the headroom is limited. Notwithstanding this, the directors believe that, bar any materially adverse event, the company will trade normally and not breach the facility.

The reason for Allen stepping down is that, whilst the company's banks are supportive and the directors are in constructive discussion with them, one of the requirements of their continued support was for Allen to step down, and therefore to ensure the continuation of the business, Allen accepted.



lolol

[wooly62] 07/5/2008 15:21

Thank you 02, that's helpful.

[02bursar] 07/5/2008 14:08

Press release 7th May: Company website

[wooly62] 07/5/2008 14:04

O2Bursar - where did you get your post #924 from - it doesn't appear to be an RNS?

[02bursar] 07/5/2008 14:04

Masurenguy post# 925. I'm also of the view that it won't go under but continue in some guise and the final para of the statement from the Board [see post #924] makes it clear that there is goodwill from all stakeholders to get a resolution. I don't think they could get that whilst the CEO was still in post, perhaps adopting a bunker or 'we'll trade out of this' mentality.

The CEO famously said that 'the market wants to settle on a £200m [revenue] company; I want to build a £2 billion'. Well a cash generative, profitable and dividend paying £200m business is preferable to a £2Billion, cash burning and potentially loss making one any day. Maybe with him gone, the Board will be able to take further actions internally to cut costs and streamline it further. That's an option. Another is a White Knight already bound up with the business such as Swisscom or Deutsche Telecom and so on. All options will be looked at and in weeks rather than months so we are told. All we can do is wait and hope for the best outcome for all stakeholders.

[wooly62] 07/5/2008 14:02

I don't do realistic any more, it makes me depressed :-(

[taffee] 07/5/2008 11:32

lets hope,but lets be realistic!

[wooly62] 07/5/2008 10:47

Taffee : you can believe it - if my memory serves correct you got involved with Torex, so you should be used to lies and nothing should surprise you! Let's hope the out-turn here is better than that....

[masurenguy] 07/5/2008 10:21

02Bursar post # 922: Well I think that it is more likely to survive in some capacity than go under but you can't assume that the banks would just have appointed a Receiver if they they do subsequently go under. The banks have a considerably amount at risk here and then would want to explore all other options to either secure or minimize their downside for a viable ongoing business rather than just pull the plug straight away. Under suspension they have up to 6 months to achieve some resolution and much will depend on the attitude of some of the larger customers to developments.

FWIW I think that a white knight will be sought to either take Vanco over completely or to take a substantial position in the company in return for a very heavily discounted stake. I think that there are a lot of interesting contracts at stake here which other Telcos would have their eyes on. The main questions for them will be at what discounted price would it be worth their while to absorb the current debt and how good would their chances be to pick up some of the juicier contracts in their own right if Vanco went down leaving potentially distressed customers in their wake.

Nothing is certain but I think that there is a very good chance that a deal will be done to preserve the business in one guise or another. However I don't really think that the final outcome of any deal is likely to be particularly good for any of the existing shareholders !

[02bursar] 07/5/2008 10:14

LATEST FROM VANCO BOARD.


"Information on Vanco's Share Suspension and Management Change
Yesterday, Vanco suspended its shares on the London Stock Exchange, and on Sunday 5th May, Allen Timpany announced his resignation from Vanco.

The principle reason for the suspension is that there is uncertainty about the results for the year ending January 2008. We are still operating within our facility, but the headroom is limited. Notwithstanding this, the directors believe that, bar any materially adverse event, the company will trade normally and not breach the facility.

The reason for Allen stepping down is that, whilst the company's banks are supportive and the directors are in constructive discussion with them, one of the requirements of their continued support was for Allen to step down, and therefore to ensure the continuation of the business, Allen accepted.

Andrew Coppel has been appointed by the Board as Chief Restructuring Officer. All other directors and managers remain in place and no further organisational or management changes are expected. The company is now managed by Mark Thompson and Wayne Churchill and no appointment of a replacement CEO is expected in the short term. Peter Johnston remains as the CFO.

Going forward, we are working very hard and constructively with our advisers and banks to find a resolution that enables the company to successfully trade through the period of suspension. We are examining all available strategic options and we expect this period to be kept to a minimum of weeks rather than months. We will continue to pay our creditors and we do not expect to see any interruption or disconnection, as we have the on going support of our carrier suppliers and banks; therefore, we expect service to continue as normal; in fact we will quite rightly be focusing all of our attention on existing customers. "

[redhill] 07/5/2008 10:12

It hasn't gone under and i wouldn't imagine the banks wishing to write off £123 million on a company that is profitable.They appear to be over-trading and the company and the banks need to work out a solution in order to reduce their exposure.If the Banks pull the plug then they have little chance of recovering their monies.

[02bursar] 07/5/2008 09:47

If it had 'gone under', the banks would have called in the Receiver and you would have heard about that.

You can bet that the Board had been having meetings with their bank syndicate after they had had a good long look at the latest cash flow projections which have determined there is no headroom within the facilities.

It's the extent of that shortfall that they'll be trying to accurately determine and see a way around and I suspect what everyone will want to know is what else may be lurking to 'fall out of the woodwork' in terms of the company's obligations under its contracts? That must be at the heart of this as within a month the situation has turned from managing within headroom to not. Those cashflow forecasts would have been based on certain critical assumptions from a starting position which would have been a projected Jan 08 year end balance sheet position. Clearly something went wrong with those starting assumptions - hence the statements about further provisions for 07-08, BS review. That BS review must be taking a long hard look, inter-alia, at the forward position of contracts and the cost implications of maintaining them against the background of the new, conservative accounting policy.

[masurenguy] 07/5/2008 08:22

"junk - 7 May'08 - 00:09 - 919 of 920: If they were going under i would have expected and indeed they would be obliged to tell us..."

They are not obliged to say anything at this stage. They have requested suspension whilst they review their financial position and until this has been completed they have not come to any firm conclusions, or made any effective decisions, about the future of the company.

Suspension and review can be a precursor of administration. It could also be a 'breathing space' opportunity to address their financial predicament by bringing in a significant new investor or by approaching potential 'white knights' for rescue. Nothing is certain - you can only wait and see.